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Thread summary:

Mortgage mess: granite counter tops, stock market, renting, maintaining property, selection of locations

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Old 01-07-2009, 03:00 PM
Location: Columbia, SC
1,860 posts, read 4,612,414 times
Reputation: 797


Originally Posted by chet everett View Post
I would agree that it is unlikely to see gains every greater than cumulative interest in all cases for any period of time, but I would argue that it is ENTIRELY possible to see gains larger than cumulative interest AND other improvements in MANY cases.

The current levels of excess inventory are adding a new dimension to the normal calculation, but I believe that in many /most areas, even accounting for the bubble, a home owner who "got in" before 03 or certainly 01 is probably in decent shape to still show a profit, especially if they used ultra-low intrest rates such as those available with many ARM products.

Assuming the "wheels don't come completely off" the whole economy I firmly believe that people will be able to own, live in, and eventually profit from their single family home in HIGH QUALITY neighborhoods with good access to schools, employment and safe recreational opportunities on a more historical normal time scale...
I agree w/most of your examples, and if everyone held their home 20-30 years like days of old, and paid down the mortgage faster than the term, then you are probably right, more people could actually turn a profit. The problem is, I think the average homeowner today lives in their house for 5-7 years if I remember right. The people buying homes though in today's market and the next year or so, will have a better chance to turn a small profit over a long period of time 15-20 years b/c they are getting such great deals. I don't give a whole lot of credence to the after tax deduction, a married couple gets around $11k as a standard deduction, so even if they pay $12k in mortgage interest, unless they have a lot of other itemized deductions such as contributions, they don't really benefit as much as realtors would like you to think. I'm not saying it's not a nice benefit, but some people gain very little by it and for those buying smaller homes, gain nothing from it.

Originally Posted by michmoldman
Damn, hate to agree with a buckeye...but I do agree.
If you really look at the interest you pay out of the monthly payment, its pretty insane. This is another of the reasons the housing bubble HAD to burst. Since most average people do not make enough to save a whole lot for a dwnpymnt, in the long run, this will be a godsend for people who could never really think of owning a house, and for people who do own a house and want to upgrade. I am good example. I have been looking at houses in our beautiful northern areas, but because tourists, and whoever else had a second home for summer up there, they can no longer afford them. So a house that was going for $200,000 a few years ago is down to $120-$130 and will probably go much lower. Now I may actually realize my dream of moving up there instead of just dreaming.
After this mess is over, a lot of people are really going to clean up!
Hmmmm....a buckeye in Columbia. I guess it does sound like Columbus.
While I love the Buckeyes, I love the weather in Columbia more than Columbus (or anywhere in Ohio for that matter)! And the name is in honor of Christopher Columbus (as Cbus in OH is), so we do have that in common! Have met a fair share of Wolverine transplants here as well! Been a tough couple of days for the Bucks, first the defensive breakdown in final minute in the Fiesta Bowl, and then the Bball team took an L last night in East Lansing, hopefully things will turn better. Both Michigan & Mich. St. look to have really good basketball teams this year.
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Old 01-08-2009, 10:45 AM
Location: Forests of Maine
32,557 posts, read 53,030,489 times
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Originally Posted by LiveTodayLez08 View Post
This whole mortgage mess has me scared.
I was already on the road of "No mortgage" for me because I've seen all the things people have had to pay for when something goes wrong with their home.
The housing prices in my state are relatively cheap comapred to other places but I still don't want a huge mortgage.

Some people argue renting is "throwing your money away" but we all need a place to stay so...oh well, my money goes to someone else. No different than a car payment, payment for food, etc.
It seems a lot of people want their houses to bring them wealth but I just want a place to stay. I don't want for much. I could care less about granite counter tops and stainless steel appliances.

Some argue if you don't have a mortgage, at least have money in the stock market but even that has me somewhat worried.

Is renting really throwing your money away?
I have heard the argument that renting is a waste.

It all depends on how you look at life.

I bought apartment buildings, We empty one unit and live in it ourselves while managing the other units. So my mortgages has always been for income producing property that provided us with a home.

With each of our properties, our money rarely has ever gone into making a mortgage payment. The rent receipts cover the mortgage [and other expenses].

If you rent; as time goes by. You have not gained any Net Worth, and you have no income tax benefit from renting.

Whereas by owning Rental Real estate the same amount of time goes by; and you have gained Net Worth and tax sheltering; and very little money came from your own pocket.
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Old 01-09-2009, 11:50 AM
Location: Chicago, IL
8,998 posts, read 13,689,775 times
Reputation: 3543
I've considered buying a home and renting it out or building a duplex while living on the other side. It's something I'll definitely keep in mind.
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